Nantucket Residents Sink as Wealthy Trim Sails

The median list price for a home in Nantucket at the beginning of July was $1.695 million, a number most year-round residents on the popular vacation island off the coast of Massachusetts can't afford. It has often been said that their are two economies in Nantucket, and the full-time residents of Nantucket are likely feeling this stronger than ever now.

A playground for prosperous visitors from Boston, New York and around the country, Nantucket possesses charm and beauty that has attracted vacationers with money for centuries. As an island, there is an obvious limit on space, but it also has a man-made limit on construction, since roughly 50 percent of the island won't ever be built upon due to environmental preservation efforts.

All this means that land is at a premium, which is particularly hard on the island's roughly 12,000 year-round residents -- who don't earn big Wall Street bonuses that allow for $5 million to $15 million summer homes. The median annual household income for year-rounders on Nantucket is around $55,500.

With vacationers pulling back on discretionary spending this year, however, an increase in foreclosures on Nantucket has created an even tougher housing market for Nantucket natives, many of whom have family connections stretching back generations.